Hindalco Industries Limited (NSE: HINDALCO, BSE: 500440) said its wholly owned subsidiary Novelis Inc. reported a net loss in the third quarter of fiscal 2026, primarily due to production disruptions and exceptional losses linked to two fires at the Oswego, New York plant, even as underlying operating efficiency improved, according to Novelis’ Q3 FY26 earnings release and presentation.
Q3 FY26 performance at Novelis
For the quarter ended Dec. 31, 2025, Novelis’ net sales rose 3% year on year to $4.2 billion, supported by higher average aluminum prices. However, rolled product shipments fell 11% to 809 kilotonnes, with management estimating a 72 kilotonne negative impact from the Oswego production disruption.
Adjusted EBITDA declined 5% year on year to $348 million, reflecting an estimated $54 million pre-tax impact from the Oswego fires and $34 million from tariffs. Despite the disruption, Adjusted EBITDA per tonne improved 6% to $430, aided by cost efficiencies, favorable recycling benefits and pricing actions.
Net loss attributable to Novelis’ common shareholder was $160 million, compared with net income of $110 million a year earlier. The loss included $327 million in pre-tax losses related to the Oswego fires, alongside unrealized derivative losses.
Cash flows, leverage and liquidity
For the first nine months of FY26, net cash used in operating activities was $90 million, compared with an inflow of $263 million a year earlier, largely due to the impact of the Oswego disruption. Adjusted free cash flow was a negative $1.64 billion, driven by higher capex and working-capital outflows.
As of Dec. 31, 2025, total liquidity stood at $2.6 billion, including $825 million in cash and $1.7 billion of undrawn committed facilities. Net leverage rose to 3.7x trailing twelve months Adjusted EBITDA. In December, Novelis received a $750 million equity infusion from its parent, Hindalco, to support liquidity during the recovery period.
Oswego plant disruption and recovery timeline
Two significant fires at Novelis’ Oswego, New York facility in September and November 2025 disrupted hot mill operations. The incidents were contained to the hot mill area, with no injuries reported. Novelis said it is leveraging its global footprint and third-party suppliers to mitigate customer impact. The company expects to restart the Oswego hot mill in late Q2 of calendar 2026.
Management estimates the total free cash flow impact of the fires, before insurance, at $1.3–$1.6 billion, with 70%–80% potentially recoverable through insurance over time.
Segment and market trends
Despite the temporary capacity constraints, Novelis said demand for aluminum products remains resilient, with particular strength in beverage packaging, its largest end market. Adjusted EBITDA per tonne rose despite tariffs and disruption, reflecting ongoing cost efficiency initiatives and improved scrap economics.
Regionally, North America shipments were lower due to the Oswego outage, while Europe saw improved shipments and EBITDA on stronger beverage packaging and aerospace demand. Asia and South America reported mixed trends in volumes and margins.
Strategic investments and outlook
Novelis continues to advance its greenfield rolling and recycling plant at Bay Minette, Alabama, with cold mill commissioning expected to begin in March 2026 and full plant commissioning targeted in the second half of calendar 2026. The facility is expected to add 600 kilotonnes of finished goods capacity, supporting long-term growth in beverage packaging and automotive segments.
Management reiterated its focus on cost efficiency, tariff mitigation and restoring full capacity at Oswego, while maintaining disciplined capital deployment.
Summary
Novelis posted a Q3 FY26 net loss due to exceptional fire-related impacts and shipment disruptions at Oswego, while underlying operating efficiency improved, as reflected in higher EBITDA per tonne. Liquidity was bolstered by a $750 million equity infusion from Hindalco. With recovery at Oswego underway and capacity expansion at Bay Minette progressing, the group expects operating normalization over the coming quarters, subject to execution timelines and insurance recoveries.